Sramana Mitra: How are you, as a mobile ad network, responding to the real-time bidding (RTB) trend?

Asher Delug: We are focusing the company very much on RTB at this point. An initiative we launched recently was our DSP (demand side platform). It allows the 5,000 mobile advertisers that are using Airpush today, which range from the largest brands down to very small local agencies, to purchase ad inventory across all the RTB exchanges and supply sources from a single interface. It takes the complexity, cost, and barriers to entry out of the RTB market for the average mobile advertiser.

The second piece we are doing, which is going to launch in a few months, is a partnership with OpenX, which is a large RTB company. We are partnering with OpenX for them to power our private exchange, which will be one of the first private exchanges in mobile and will allow RTB advertisers to access the Airpush inventory programmatically. You can look at these initiatives as a demand-side initiative and a supply-side initiative.

SM: Let’s talk about a few of your clients and present some use cases.

AD: Appia, which is a top three mobile ad agency, has significantly grown their business via Airpush ad inventory. The reason for that is that Airpush ad inventory performs exceptionally well due to the nature of our ad formats. Originally Google, MilleniumMedia, or InMobi came up with a very basic ad format – the banner ad – whereas Airpush came up with different ad formats, for example, our push notification ad format. This allowed users to click on the ads at their own convenience as opposed to within only a few seconds of it showing in the app. This allowed campaigns to perform significantly better. Your average app install campaign would perform at around a 0.5% conversion rate. In our case, we are noticing that you could get a up to three times higher conversion rate. By making the innovation of the new ad format, we drove significantly better performance for other companies in the value chain, such as Appia.

SM: You said the space is right for consolidation. What are the opportunities for differentiation? Are the ad formats the primary differentiation point? Are you seeing any other points?

AD: There are two major battlefields for innovation right now in the industry. One of them is ad formats. That has been our primary means of innovation. We have created new patent-pending ad formats, which have given developers a material list in CPMs. That has driven the explosive growth at Airpush. The second differentiator is first-party data. That is the same thing that happened on the web. It is not enough to just have a large number of publishers. You need a data strategy that allows you to collect data anonymously about users – what ads they click over time and other data collection strategies. Using that data to allow advertisers to target users better. That is what is bifurcating the industry into winners and losers. It is the “data haves” and the “data have-nots.”

SM: So, ad formats and data are the two primary vectors of innovation.

AD: Exactly.

SM: And if you look at the more than 100 ad networks, who are the prime innovators on the data side, and who are the prime innovators on the format side?

AD: On the format side, we are the top of that list. Everyone else took web formats and applied them to mobile. You have banner ads on websites, so they took banner ads for mobile apps. It actually doesn’t work well at all, but there is enough volume for companies to still grow doing that. We have created three patent-pending ad formats, each of which are very large businesses on their own. There is no other company in the industry that can claim that.